“We are pleased with EPA’s decision not to waive the Renewable Fuel Standard for this year. The RFS has helped reduce our dependence on foreign oil from 60 per cent in 2005 to 45 per cent today and currently supports almost 500,000 American jobs and generates $53 billion in economic activity each year. Furthermore, the existing structure of the RFS provides sufficient market flexibility in case of a drought or other market disruption.

“It is crucial that we maintain a stable and long term biofuels policy in order to incentivize the commercialisation of next generation biofuels," Mr Johnson concluded.

The decision is based on economic analyses and modeling done in conjunction with the US Department of Agriculture (USDA) and US Department of Energy (DOE).

In an announcement on their website, the EPA state: EPA recognises that this year’s drought has created significant hardships in many sectors of the economy, particularly for livestock producers. However, the agency’s extensive analysis makes clear that Congressional requirements for a waiver have not been met and that waiving the RFS would have little, if any, impact on ethanol demand or energy prices over the time period analysed.